Companies which experience rapid growth paired with a high turnover rate in staffing often manage the problem using a reactive approach, that is employees who are adept at their job are promoted without proper training and thrown into the world of management in a “trial by fire”. This leads to several problems in and of itself: lack of respect from the remaining employees, lack of proper and appropriate communication, inability of upper management to do little more than put out the latest fire and a further increase in the turnover rate. According to Small Business Transitions, “The main reason for failure [in business start ups] is inexperienced management”.
In the case of Milinder Recycling, the management team is composed of employees who were hired only brief months before their promotion to fill spaces vacated by new hires who subsequently left the company. With no management experience and little or no training, these individuals are “thrown to the wolves” and expected to fend for themselves.
According to Keith Mudd, Director at the University of Houston Victoria: “Most business problems are people problems. More explicably, the problems are either what people have created or the result of having inadequate and inexperienced staff.” Once an employee is promoted to a position with more power, it is often difficult to do something about it. The only option is demotion (which is usually not accepted) or dismissal (which only furthers the problem of high turnover).
The key in dealing with this problem is to be proactive in the future. The first step for upper management at Milinder Recycling is to reformat their Human Resources department (if they have one; if not this lack needs to be rectified immediately!). The job of recruiting personnel should be to keep staffing levels on par with need and to retain resumes from applicants who might not fit into a current position but would be good hires when the need arises.
Secondly, upper management needs to work more closely with the newer managers. A process of the more experienced staff shadowing the inexperienced managers, if only for an hour or two a day, would be very beneficial not only to the new managers but to upper management to identify where problems are occurring. A weekly training session focusing on some aspect of management needn’t be scheduled for more than an hour and can be slotted into a slow sales period. Training sessions including topics such as mentoring employees, hiring good employees, treating employees fairly, etc. are all good to begin with.
New managers also need to be held accountable. Procedures regarding key communications (and the manner in which it is communicated) and processes should be in place that apply to all management positions (again, the Human Resources department would be responsible) and managers held accountable for performing these duties. After a certain number of warnings for noncompliance, the manager can be then demoted, or, if necessary, fired.
According to Small Business Transitions, “Managerial issues such as the poor use of outside advisors, lack of emphasis on quality, an unwillingness to delegate responsibilities, departure of key personnel, and ‘personal’ problems associated with the owner/manager become relatively more important factors that contribute to failure as a business ages.” Milinder Recycling is moving in the right direction by promoting growth but missing the boat on obtaining experienced key personnel to help achieve successful growth.
Mudd, Keith, (2006). It’s Always People Problems… Retrieved September 17, 2007 from University of Houston Victoria Small Business Development Center: .
Small Business Transitions (2007). Thirteen Stupid Tricks by Business Owners. Retrieved September 17, 2007 from the SBT Web site.